The deal has been signed with the U.S. Department of Justice (USDOJ) and the U.S. Environmental Protection Agency (USEPA) relating to incidents on the Line 6B pipeline in Marshall, Michigan in July 2010, and on the Line 6A pipeline in Romeoville, Illinois in September 2010.

The settlement deal has been signed with the US Department of Justice (USDOJ) and the US Environmental Protection Agency (USEPA) relating to incidents on the Line 6B pipeline in Marshall, Michigan in July 2010, and on the Line 6A pipeline in Romeoville, Illinois in September 2010.

The Decree will take effect following a comment period and upon approval by the US District Court for the Western District of Michigan.

Both Line 6B and Line 6A are part of the Lakehead Pipeline system owned by Enbridge Energy, Limited Partnership, a subsidiary of EEP.

"From the beginning, we've taken responsibility for the Line 6B release. We accept the civil penalties and enhanced safety measures in the Decree. The enhanced safety measures included in the Decree are consistent with our approach to safety and integrity and our current practices and have largely been implemented over the past six years," said Mark Maki, President for the Partnership. "In fulfilling the terms of the agreement, we will cooperate with the U.S. Department of Justice and the U.S. Environmental Protection Agency."

There are three primary components to the terms of the Decree:

Civil penalties: The Decree sets civil penalties under the Clean Water Act of US$61 million relating to the Line 6B release and an additional sum of US$1 million related to the Line 6A release, each payable within 30 days of the effective date of the Decree. The amount of the penalties largely had been accrued by EEP and included in previously reported total estimated costs related to the 6B release. EEP has previously resolved claims for natural resource damages, as detailed in the Decree, and in May 2015, signed an agreement with the State of Michigan with respect to mitigation payments.

Safety measures: The safety measures set out in the Decree codify and build on continuous improvements that have been implemented since 2010 including enhancements to the comprehensive in-line inspection (ILI)-based spill prevention program; enhanced measures to protect the Straits of Mackinac along the Line 5 Straits Crossing; improved leak detection requirements; installation of new valves to control product loss in the event of an incident; continued enhancement of control room operations; and enhanced spill response capabilities. The total cost of these measures is estimated to be approximately US$110 million throughout the four-year term of the Decree and is already largely incorporated in EEP's operational and capital expense planning.

Pipeline replacement: EEP replaced the entire 285-mile length of Line 6B in 2014. 

In 2014, Enbridge and its customers agreed to the full replacement of Line 3 in Canada (owned by Enbridge) and EEP and its customers agreed to the full replacement of Line 3 in the U.S. (owned by EEP) and embarked on engineering, design, environmental and permitting activities which are substantially advanced. Pending regulatory approvals, the new 292-mile US segment between Neche, North Dakota and Superior, Wisconsin, is anticipated to be placed in service in early 2019. The estimated cost of approximately US$2.6 billion is included in EEP's long-term capital investment plan. The Decree directs EEP to continue with this project.

Lessons learned

Commenting on the Decree, Al Monaco, President and Chief Executive Officer, Enbridge said, "From the beginning, Enbridge and EEP made a commitment to the people of Michigan that we would clean up and restore the Kalamazoo River and surrounding areas, and cover the costs. We've done that. We've worked extremely hard to fulfil our commitments and make good on our promises. That accountability continues with today's announcement.

"The learnings from our experience have made us a better company and the way we think about safety has changed. Over the past six years, we've intensified our focus on the safety and integrity of our systems enterprise-wide and we've invested significantly in our people, processes, equipment and technology. Across Enbridge, our team is galvanized by our number one priority of safety and reliability of our systems and the protection of the public and the environment."

Following the Marshall spill, between 2010 and 2014, Enbridge and EEP significantly enhanced efforts to better understand the condition of its pipelines and mitigate risks, while increasing staffing dedicated to preventative measures, maintaining system fitness and leak detection and pipeline control. Enterprise-wide, Enbridge executed a comprehensive maintenance and inspection program using the most sophisticated inspection tools available with a total investment of nearly $5 billion.

Enbridge and EEP continue to invest significantly in maintenance and integrity management programs across its enterprise in the U.S. and Canada. In 2015, Enbridge achieved record safety performance across its liquids pipeline systems, safely delivering more than 2.8 billion barrels of crude oil used to create gasoline, jet fuel and a variety of products essential to our daily lives.

"Our substantial investment has increased our confidence that our system is safe and reliable and enables us to provide greater comfort to our stakeholders that we're doing everything we can to protect them," said Mr. Monaco, "We're proud of having achieved industry-leading performance in 2015. But while that's good, we're not satisfied. No incident is acceptable to us and our safety culture challenges us to continually strive for our goal of zero incidents."

The Kalamazoo River today

Enbridge worked closely with the U.S. EPA, Michigan Department of Environmental Quality and several local agencies to conduct a thorough cleanup and restoration of areas impacted by the Line 6B release. Portions of the Kalamazoo River were re-opened for recreational use beginning in April of 2012. All portions of the Kalamazoo River have been open since October of 2014, and state and federal regulators have determined the river and other impacted areas to be completely cleaned. EEP also built new recreational facilities and river access and improved existing facilities, creating an endowment to provide for long-term maintenance of those new facilities.

"Protection of the public and the environment is the key pillar in delivering the energy people depend on. But that's not the end of our focus; it's the beginning. We fundamentally believe that to be the leading energy company in North America requires a relentless focus on getting better. And getting better is at the heart and soul of our company," said Mr. Monaco.